House of Commons Hansard Debates for 3 Apr 1995

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Question accordingly negatived.

New clause 16

Rebate mechanism for irrecoverable VAT for charities

`(1) The Financial Statement and Budget Report for 1995 shall include for the financial years 1996-97, 1997-98 and 1998-99, Treasury estimates of--

(1)(a) the total amount of VAT to be collected;

(b) the total amount of VAT paid to be paid by charities on-- (i) business activities; and

(ii) non-business activities;

(c) the amount of VAT paid by charities on input tax on expenditure in pursuit of their charitable objectives which cannot be recovered.

(2) There shall also be included an estimate of the effect on the PSBR of a mechanism to rebate to charities by grants-in-aid a sum equivalent to:

(i) 25 per cent;

(ii) 40 per cent; and

(iii) 50 per cent:

of the irrecoverable VAT paid by them.'.-- [Mr. Alan Howarth.] Brought up, and read the First time.

9.15 pm

Mr. Alan Howarth (Stratford-on-Avon): I beg to move, That the clause be read a Second time.

The new clause would require the Government to provide information that would enable us to appreciate the scale of the problem of irrecoverable value added tax which faces charities.

We are asking charities to do more and more. For example, care in the community invites charities to play a new, more formalised and more extensive role in social provision. That is as it should be. Our aspirations for social provision are rising. We know that state agencies, crucial as they are, are insufficient. Of their nature, they tend to be broad-brush in their approach, somewhat clumsy and somewhat insensitive to the infinite variety of human need. By contrast, charities at their best reach the parts of society that bureaucracies are unable to reach. Charities have

entrepreneurial qualities, and they are cost-effective.

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It is right that we are seeking to mobilise them in a partnership to enlist all the resources of generosity in our society. There is a perversity in our fiscal system, which lies in irrecoverable VAT. Charities are being asked to provide residential homes, day centres and respite care. They are expected to demonstrate cost- effectiveness by tendering against commercial organisations and to demonstrate their effectiveness compared with local authority providers.

At the same time, local authority providers, providing the same services as charities, do not have to pay VAT. Commercial organisations can reclaim VAT, or, if they are engaged in the provision of exempt services, they can build in a profit factor to offset the cost of irrecoverable VAT. That is not possible for charities for the greater part of their activity.

The services that charities provide are mostly VAT exempt or outside the scope of VAT. They are unable to recover the VAT that they have paid on necessary supplies to enable them to deliver services. The Charities Tax Reform Group estimates that the cost of irrecoverable VAT to the charitable sector is about £335 million annually. New research by London Economics suggests that the figure may be nearer £550 million.

I shall give some examples of the burden on particular charities. Methodist Homes for the Aged found itself paying £450,000 in irrecoverable VAT. The National Society for the Prevention of Cruelty to Children paid £650,000 in a year. Help the Aged paid about £750, 000. The Royal National Institute for the Blind paid £1.2 million. Some charities are losing about 10 per cent. of their income in irrecoverable VAT.

If policy is to be consistent, and if we are to provide for fair competition in the developing market for care, we must redress the balance. The solution is the establishment of a refund scheme whereby charities would be compensated through Treasury grant in aid for a set proportion of the VAT that they incurred on their non-business expenditure. I emphasise that the charities would not keep the money that came back to them as profit; they would plough it back into services.

Such a scheme works successfully in Canada, where charities are able to reclaim half the amount spent in general services tax at the end of the financial year. The Charities Tax Reform Group has been advised by the European Commission that such a scheme would be permissible within European law.

The proposal is that the scheme should apply only in relation to non- business expenditure, which would go a long way to safeguard against fraud. Such a scheme would also be flexible, enabling my right hon. and learned Friend the Chancellor to vary the proportion of irrecoverable VAT which would be rebated according to the circumstances of the economy and his judgment of what he could afford.

Such a scheme ought to be attractive to the Treasury and to my hon. Friends on the right, because they could look forward, if they wished to do so, to some substitution of charitable activity for state activity. Charities also provide excellent value for money. This scheme should also have a broader appeal; it should recommend itself to others of my hon. Friends and to the Opposition, because it would make for a cost-effective increase in social provision.

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The standard objection advanced against this argument over the years is that it is Government policy to provide fiscal concessions to encourage charitable giving, and that we cannot have it both ways. Speaking as the chair of the all-party group on charities, I know that the increase over many years in tax concessions for charitable giving has been very much appreciated--at least until the March 1993 Budget.

Until that date, the cumulative value--I speak from memory, and my hon. Friend the Paymaster General will correct me if I am wrong--of tax concessions on charitable giving introduced by this Government amounted to £900 million a year. Since then, however, the Treasury has been somewhat less benign. In the March 1993 Budget, we saw the measure on advance corporation tax for charities and the introduction of VAT on domestic fuel and power. The consequence was that charities lost £100 million net in tax terms.

Alongside that fiscal setback, charities then and since have suffered from fairly tight restraints on the capacity of central and local government to make grants to them. The recession caused enormous difficulties for them in fund raising with the private sector. Charities have recovered very unevenly from the recession. The Government's strategy of switching the emphasis from direct to indirect taxation and the prospect that my right hon. and hon. Friends hold out of progress towards a 20p basic rate of income tax challenge us to a fundamental reconsideration of the tax treatment of charities. We should not, of course, reduce the concessions for charitable giving, but we should recognise that encouragement for giving is insufficient.

There is, after all, a certain randomness. Although we should respect the wishes of donors to charities and should let them make their own judgments, we should recognise that, in terms of how social need is to be addressed, there is considerable randomness in the pattern of charitable giving. Although the great majority of charities are active, efficient and competent in what they set out to do, we cannot say that of all of them.

There is a case for a new emphasis on supporting charities that do things-- charities that make social provision. It is often provision in unglamorous, unfashionable, but vitally necessary areas. My right hon. and hon. Friends ought seriously to consider how they will remedy the problem that the Government take more away in VAT from some charities that perform extremely valuable social tasks than those charities gain in concessions on charitable giving. The Government want charities to play an important part in the pattern of social provision. Charities are strongly placed to do so. They are cost-effective. Their gearing, through their capacity to mobilise voluntary support, means that they have an enormous amount to contribute for the money that they dispose of. They are innovative.

We ought to be systematic in our encouragement and support of the charitable sector. I put it to my right hon. and hon. Friends that we need a systematic review of the tax treatment of charities and the totality of Government's policy in relation to charity, so that we can do our best to ensure that it is coherent and that charities are consistently supported.

The ways and means resolution and the money resolution that we have approved mean that it is not possible to table a new clause that would be in order

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which would provide substantively for the implementation of a compensation scheme such as I have argued for. Therefore, I have tabled new clause 16, which would require the Government to supply information that would illustrate the situation and the need. It is my hope that, in researching and considering the estimates that the new clause would require, my right hon. and hon. Friends will be persuaded of the necessity of a VAT compensation scheme.

Mr. Tim Smith: In recent years, charities have had to bear an increasing burden of VAT, as my hon. Friend the Member for Stratford-on- Avon (Mr. Howarth) has said. He is right when he says that we should have a comprehensive review of their liability to pay VAT. His new clause has my full support.

Ms Primarolo: I congratulate the hon. Member for Stratford-on-Avon (Mr. Howarth) on tabling new clause 16. As he said in his closing remarks, the ways and means and money resolutions are drafted tightly, so it would be difficult, if not impossible, to table an amendment that would be in order. He was right to table a new clause asking for information to identify the scale of the difficulty experienced by charities because of irrecoverable VAT. We support the principle that we should look carefully at the impact of the increasing importance of VAT as the major element in the Government's strategy of shifting from direct to indirect taxes.

As the hon. Member for Stratford-on-Avon highlighted, charities mostly provide services which are exempt from VAT. Therefore, they are unable to recover VAT where they have paid it on purchases of necessary supplies.

The director of finance and administration of the National Children's Home has said:

"The irrecoverable VAT burden of NCH in 1992/93 was £891,000." If it had been able to use that money to finance its activities, it would have been able to open and run another 20 family centres. As has been pointed out, examples such as the Canadian tax regime, in which proportions of tax are reclaimed by charities, are worthy of consideration by the Government. It would be important that any scheme limited the recoverable VAT to non- business expenditure only. We support the principle of the new clause. I hope that the Paymaster General will tell us that the Government are willing to look closely at the difficulties that charities are experiencing. I hope that he will tell the House how we could introduce a sensible tax regime that did not penalise the charities to the extent that they are penalised now.

9.30 pm

Mr. Heathcoat-Amory: I pay tribute to the good work done by the charitable sector, described eloquently by my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth). The Government recognise that work by, for instance, granting tax reliefs, as my hon. Friend mentioned.

A number of specific VAT reliefs are granted for charitable purchases, which save the sector about £150 million a year--perhaps one third of its potential VAT bill. The reliefs cover purchases of medical research and rescue equipment such as lifeboats, equipment for

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disabled people, the construction of certain charities' buildings, and advertising to raise funds. Moreover, the sale by charities of donated goods is zero-rated, and admission to fund- raising events such as concerts is exempt. Those reliefs may be worth another £50 million. Direct tax reliefs are worth about £830 million, and exemption from business rates about £240 million.

It is clear that the charitable sector as a whole has been given a wide range of reliefs to enable it to do the good work that we expect of it. The general VAT rebate scheme outlined by my hon. Friend the Member for Stratford-on-Avon and others, which would apply to all charities, would be very expensive; it might cost a further £300 million a year--money that would either go straight on to the budget deficit or have to be found elsewhere. Moreover, such a scheme would give most benefit to bodies spending heavily on taxable goods and services, regardless of the aim of the charity or the nature of the expenditure.

Charitable status is widely granted: there are about 170,000 registered charities in the country. Both this evening and in discussions elsewhere, my hon. Friend has spoken of the importance of social provision by charities, but it would be almost impossible for us to differentiate between charities of that kind and the generality of registered charities-- which include universities, providers of private medical care and public schools. We must be cautious about granting another general tax relief by way of a VAT refund scheme; the good it might do would not be particularly narrowly focused. I now realise that the new clause was intended as a probing measure; before my hon. Friend made that clear, I was a little worried. The figures requested would be extremely difficult to obtain, certainly on a routine basis: much of the information could not be obtained from VAT returns, for the good reason that most of the activities involved are exempt from VAT or outside its scope, because the charities concerned are not registered.

Therefore, the information would have to be obtained from surveys, which would not only be administratively expensive for Customs and Excise but would impose on the charities a compliance cost that might not be altogether welcome. If my hon. Friend wishes to obtain further and better information about the sums involved, which is the requirement of the new clause, I should be happy to answer a parliamentary question.

I think that I said enough earlier to show that, although I am highly sympathetic to the aims of the clause, and genuinely acknowledge the work that is done by charities, especially in filling the gaps that must always exist in state provision and in finding new and innovative ways to respond to human needs, I must resist, without any misunderstanding, the thinking behind the proposal. We do not contemplate a general VAT refund scheme, despite the eloquence of my hon. Friend's pleadings.

Mr. Alan Howarth: With his usual astuteness, my hon. Friend has perceived that the new clause was probing. I am grateful to him for his sympathetic view of the issue. It is important, and I hope that the debate, which I am glad we have had, will encourage the Government to think systematically not only about this issue but about the totality of Government fiscal policy in relation to charities. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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Madam Speaker: We now come to new clause 18. The three hon. Members who are eligible to move it are Mr. Knapman, Mr. Alexander and Mr. Rupert Allason. As they are not present, the new clause falls.

Clause 8

Hydrocarbon oil: "road vehicle"

Mr. Heathcoat-Amory: I beg to move amendment No. 68, in page 6, line 21, at end insert--

`Vehicles used between different parts of land

4A. A vehicle is an excepted vehicle if--

(a) it is used only for purposes relating to agriculture, horticulture or forestry,

(b) it is used on public roads only in passing between different areas of land occupied by the same person, and

Madam Speaker: With this, it will be convenient to discuss also the following: Amendment No. 91, in schedule 4, page 169, leave out lines 39 and 40.

Government amendment No. 69.

Mr. Heathcoat-Amory: We are denied an outing on amusement machine licence duty. The amendment relates to vehicle excise duty changes and it might be helpful briefly to remind hon. Members of the reasons for the changes to that duty, which are set out in schedule 4. The existing system of VED suffers from a great many faults. It is archaic, in some cases dating back to before the second world war, and as a result it no longer concentrates special treatment and concessions on those who most merit them. It is also extremely complex. There are 132 separate classes for this type of indirect taxation. Consequently, it is bureaucratic and I am afraid that it is also prone to evasion. Therefore, we have used the Bill as an opportunity to push through major reform and restructuring of the vehicle excise duty system.

Any reform on this scale is not easy and we made a number of consequential changes after discussing the matter during earlier debate on the Bill and with the trades and associations that are affected. The system that is set out in schedule 4 addresses the faults that I have outlined and the 132 classes are reduced to fewer than a dozen. Special treatment is now concentrated on the most deserving, opportunities for evasion are closed and bureaucracy is reduced.

The amendment relates to farming, horticulture and forestry because it is obvious, especially to hon. Members with agricultural constituencies, that farm operators are frequently obliged to make short journeys between parcels of land in the same ownership. Such limited use of the public roads warrants the continued exemption from VED and entitlement to rebated fuel.

The old 6-miles-per-week exemption was bureaucratic and virtually impossible to enforce and our original intention was to abolish it. However, I said clearly in Committee that I would listen to representations from hon. Members, the National Farmers Union, the Country Landowners Association and others on whether we could design an exemption that was less bureaucratic and more

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enforceable, but which would give relief, where merited, to those farm vehicles making inevitable short trips along public roads.

Ms Primarolo: I am listening carefully to the Paymaster General. Can he confirm that the proposals before us are not less restrictive than the previous 6-miles-per-week regulation, but are less bureaucratic? Is he saying that, basically, it is the same arrangement but in a less bureaucratic form?

Mr. Heathcoat-Amory: The proposal is certainly less bureaucratic because previously the farmer had to fill out a complex annual form. If he needed to divert from the route laid down in the form because, for example, of a blockage in the road, theoretically he had to write for permission to make the detour.

The proposal is also more enforceable because, instead of a system based on time and distance--6 miles per week--we have agreed to a scheme that gives exemption to vehicles used for agriculture and similar purposes where no trip on a public road between land in the same occupation exceeds 1.5 km, which is about as near to a mile as the metric system allows. To enforce that, the police officer no longer has to guess how many miles the vehicle has travelled in a week; instead, he can easily judge whether the vehicle is within 1.5 km of the nearest land in that particular ownership or occupation. It is a different system and a slightly different category of vehicles will benefit, but the overall intention is the same. In general, it is slightly more generous than the system it replaces. Under the old system, if the limit of 6 miles per week had been used up, in theory the farmer was not entitled to any more trips on a public road. Now, he can make an unlimited number of journeys on a public road, within the overall constraint that they can be no more than 1.5 km in distance. I commend the amendment to the House.

Mr. Tyler: I want to mention the concerns that the agricultural, horticultural and forestry industries had about the original proposal, from which, to some extent, the Government have now retreated. That is welcome.

I have two questions for the Paymaster General. First, why was the original proposal ever included in the Bill? Clearly, consultation must have been absolutely minimal if the Government now have to make this major, albeit welcome, change. The only thing that I can think of that might have been the logic behind the original proposal is that Conservative Members who represent agricultural constituencies must have told the Government that such was the scale of current agricultural enterprises that they had so many private roads that the exemption was no longer necessary.

The other question is why the distance of precisely 1.5 km has been chosen. It is near a mile, but why were not the distances of 1, 1.5 or 2 miles chosen? That restriction does not seem to have any particular logic. No precedent for it exists in similar legislation from the past, or in present restrictions.

The Government's retreat is welcome. I know that all three industries will be delighted that, at long last, the Government have recognised the problem that they were creating. However, the attempt to reduce bureaucracy could still result in a number of problems. The provision on vehicles that are used only for agriculture, horticulture and forestry purposes might, for example, not catch in its

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net a pick-up truck that is used for leisure purposes at weekends--not that farmers ever get any leisure time. They may find that, if a tight net were drawn, a vehicle used for leisure purposes would not be captured within the amendment and, therefore, that they would not have the exemption either from fuel or vehicle excise duty.

I hope that the system will prove simpler than that of the past, and than that which would have resulted from the original proposal. I thank the Paymaster General for listening to hon. Members on both sides of the House at an early stage in Committee. I hope that he will be able to answer those two simple points when he replies to the short debate.

9.45 pm

Mrs. Jacqui Lait (Hastings and Rye): I want to thank my hon. Friend the Paymaster General for the changes. Farmers in Hastings and Rye quickly alerted me to the difficulties with the original proposal. I know that they are pleased about not just the changes in the distance that they can drive, but the reduction in bureaucracy. Every farmer would dearly like to have fewer forms to fill in. The reduction of one will be much welcomed.

Mr. Robert Key (Salisbury): I ask my hon. Friend the Minister to consider new section 4A(b), which states that the vehicle should pass between

"different areas of land occupied by the same person". On many occasions, the cost of agricultural machinery is so great that farmers buy machinery jointly, or have a working arrangement to farm each other's land and share the machinery. Although those farmers meet the purposes of new section 4A(a) and (c), the lands that they farm may not technically be occupied by the same person, even though they may be only 1 or 2 km away from each other. That is important to farmers in my constituency such as Mr. Sandell and Mr. Crook of Amesbury, who have a river and a bridge between their land. They would not benefit from the clause simply because they do not occupy each other's land.

Mrs. Margaret Ewing (Moray): I shall be extremely brief, but I want to refer to my amendment No. 91. I accept that amendment No. 68, which stands in the name of the Chancellor of the Exchequer, is a massive improvement on the original proposal. The Paymaster General has referred to his desire to reduce bureaucracy and the complexity of forms that farmers must fill out, but I do not believe that the amendment will reduce that complexity. Aspects of it will lead to various arguments being propounded as to what an agricultural vehicle is exactly.

The amendment is not particularly clear when it states:

"for purposes relating to agriculture, horticulture or forestry". Will that, for example, include a truck that is not defined as a tractor or an agricultural implement? That is one of the concerns that many farmers have about the definition of an agricultural vehicle.

Has the Paymaster General received any representations recently from the National Farmers Union for Scotland or from Forestry Enterprise on the provision allowing an unlimited number of journeys of 1.5 km? Realistically, that provision is not particularly helpful in regions such as mine, where farms or forestry may cover vast areas of land. Farms may not be especially profitable,

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but they cover vast areas. I wonder whether there has been any recognition of the particular geography or topography of certain areas.

I echo the sentiments that have been expressed about co-operation between farmers which may involve moving implements from one farm to another, thereby leading to the 1.5 km provision being exceeded. It is important to clarify the issue so that we do not get into yet another muddle and in order to avoid bureaucracy. Our farmers and foresters are extremely concerned.

While there has been a general welcome for the amendment, I hope that the Paymaster General will take on board the fact that there are still reservations about it. I hope that we can be provided with a final definition.

Mr. Peter Griffiths (Portsmouth, North): The Paymaster General referred to "the most deserving case"--I think that that was the phrase-- being kept in the revised regulations. I wonder whether he may come to regret that phrase because, although I have no objection to the proposal to reduce the burden on those who operate vehicles for forestry or for agricultural purposes, other groups of people in an almost identical situation do not receive the same sympathetic attention.

I am thinking of, for example, plant hire companies that provide, for use in construction, vehicles which are often used on the road for only part of the time. They are faced with a great increase in tax in the Budget and, while I accept that the merits of the case for agriculture may be strong, other groups do not benefit from the subsidies received by agriculture and forestry but, as they are involved in the construction industry, face considerable difficulty in passing on the increased tax burden.

Mr. William Ross (Londonderry, East): I echo the views expressed by the hon. Members for Moray (Mrs. Ewing) and for Salisbury (Mr. Key) about co-operation among farmers. I think that the House will appreciate that the smaller the farms, the more likely there is to be such co-operation. Indeed, it is not so much common as nearly universal in Northern Ireland. I hope that the Minister will take on board the comments made a few moments ago.

I draw the House's attention to a matter which has not yet been mentioned, at least not in my hearing--the 1.5 km provision. In Northern Ireland and, no doubt, in slightly different forms throughout the United Kingdom, we have a system of renting land. In Northern Ireland it is called conacre. It involves renting land for a particular crop for one year. It is of considerable value to specialist potato growers and, to a lesser extent, to specialist grain growers and, of course, in respect of grass silage which often has to be grown at a considerable distance from where it is needed. The periods of time during which tractors and other vehicles are used to move crops are comparatively short--in some cases, only a few days each year. As the House will know, at such times it is a question of every possible vehicle being put on the road to do the work in the shortest possible time. Crops are sometimes grown on land that is considerably further off than 1.5 km. Indeed, I should have thought that 10 km was a more reasonable distance to include in the legislation. Perhaps the Minister will take that point on board in addition to that made by

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the hon. Members for Moray and for Salisbury and attend to them next year, as I do not expect that any further changes to the Bill will be made now.

Mr. Heathcoat-Amory: I was asked why the original proposal was to do away with the exemption. It was simply because it was bureaucratic and unworkable and the House should not pass or tolerate laws that are described as such. I made it clear, however, that if agricultural and similar vehicles could be exempted from vehicle excise duty in a way that overcame the problems, I would consider it. Since I said that and since we have had the meetings with the trade

representatives, we have found exactly such a way and I commend it to the House.

I was asked why the amendment sets out a distance of 1.5 km. I own that I would rather have put "1 mile" in the statute, but I am advised that nowadays we are all going metric. I do not know why, but I can guess. It is certainly the case that, from 1999, our statutes have to reflect kilometres and other metric measurements, with a few exceptions that do not cover this case. I went for the nearest length equivalent to a mile and came up with 1.5 km, which is reasonably comprehensible to farmers, even though most of the farmers I know are still in the day of rods, poles and perches--if they are very modern they talk about furlongs. I am afraid that we must all go metric in due course, and so the figure in the statute will be 1.5 km. On the argument of my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) about construction vehicles, the rationale for the agricultural exemption is the low mileage on roads. Often, farmers simply have to cross a main road--they do nothing more than that--so they do not use the public highway in any real sense of the word, whereas construction vehicles and the like use public roads, which explains the difference in treatment.

I was also asked about farms that may not be in the same occupation, but use the same vehicles. Contract vehicles frequently travel quite short distances between different farms, but during a year they tend to make significant use of public roads. They would not have benefited under the old exemption of 6 miles per week and it is not right, therefore, that we should design a markedly more generous system to replace the one that we are doing away with.

Mrs. Ewing: Can the Paymaster General differentiate between a contract vehicle and one that is owned by a co-operative?

Mr. Heathcoat-Amory: Yes, but I think that the general point still applies. If a co-operative's vehicle moved frequently between different farms, it would not have benefited under the old system of 6 miles per week and, typically, would do more than the 1.5 km hops between land, even if we were to change the statute to allow such hops between farms to include movements

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between land in different ownership. Obviously, we have to draw a line at some point and I think that we have done so in the right place.

Mr. Tyler rose --

Mr. Heathcoat-Amory: The hon. Gentleman spoke earlier and I am trying to answer him, but I will be happy to listen if he has a different point.

Mr. Tyler: I want to draw the Paymaster General's attention to the words "same person" in paragraph (b) of the amendment. It is not clear to whom that applies--the same as what? In this case, it is extremely important because, as the hon. Member for Salisbury (Mr. Key) said, "same person" might mean something in the context of a co-operative. The "same person" is very difficult to define. I think that the hon. Member for Salisbury is agreeing.

Mr. Heathcoat-Amory: The use of "same person" means that it applies to a farm in the same ownership. We are exempting a farm vehicle--a tractor or whatever--when it moves from a field owned by a man or a partnership to a different field in the same ownership. If it involves a journey of less than 1.5 km, the farm vehicle will be exempt from vehicle excise duty. That is reasonably clear and I commend the measure to the House.

Amendment agreed to .

Clause 14

Rates of Duty

Mr. Denis MacShane (Rotherham): I beg to move amendment No. 83, in page 10, line 13, after `State', insert `or Cyprus or Malta'. The amendment deals with the transport by air from this country to two Commonwealth nations that lie within the European geographical area: Cyprus and Malta.

Some 50 years ago, the air over Malta was full of aeroplanes--those of the Nazi Luftwaffe trying to crush that little island out of existence. Britain owes a debt to Malta and, as we celebrate VE day, the Bill provides the House with an opportunity to give the people of Malta a small present by reducing from £10 to £5 the air passenger duty that British holidaymakers must pay when they fly to Malta. 10 pm

As hon. Members may know, we have two rates of air passenger duty: £5 for the European Union and the European Economic Area; and £10 for the rest of the world. The amendment simply proposes that, as Commonwealth countries, Malta and Cyprus should be treated on an equal footing with the European Union in that regard and people travelling by air from the United Kingdom to either Malta or Cyprus should pay only £5 in air passenger duty.

The sum involved is minimal. Some 500,000 holidaymakers from the UK go to Malta each year and a little under 1 million go to Cyprus, so the Cypriot tourist industry is suffering. To make that concession just to Malta holidaymakers would cost less than the share options to be exercised by the chairman of the National Grid. Given that this is a chance to pay a practical tribute

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